Daily Market Lookup

• Asian stock markets were mixed on Friday, with sentiment torn between investors worried that the U.S.-China trade war was becoming more protracted, and others hopeful that the world’s two largest economies would reach a settlement soon. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan bounced back to trade flat after hitting a four-month low earlier. The index is still on track for a third straight weekly loss, down 0.8% so far on the week. U.S. President Donald Trump said on Thursday that Washington’s complaints against Huawei Technologies might be resolved within the framework of a U.S.-China trade deal, while calling the Chinese telecom giant “very dangerous.” Jasper Lawler, head of research at London Capital Group, said “the fact that Trump is still talking about a trade agreement is offering some optimism to the markets.” Washington last week effectively banned U.S. firms from doing business with Huawei, the world’s largest networking gear maker, citing national security concerns The U.S. Commerce Department said on Thursday it was proposing a new rule to impose anti-subsidy duties on products from countries that undervalue their currencies, in another move that could penalize Chinese products. China’s Commerce Ministry hit back on Thursday, with its spokesman saying “if the United States wants to continue trade talks, they should show sincerity and correct their wrong actions.” The euro on Thursday slumped to levels last seen in May 2017 as a recovery in euro zone business activity was weaker than expected. Early Friday, the currency was flat on the day at $1.1181. Sterling weakened again on Thursday as pressure mounted on British Prime Minister Theresa May to name a date for her departure after a backlash over her last-ditch plans for Britain’s exit from the European Union.
• The dollar was on track on Friday to post a small weekly loss after coming off two-year highs on lower U.S. yields as investors feared the Sino-U.S. trade dispute will hurt the U.S. economy more than previously thought. Another factor keeping the greenback down was rising expectations the Federal Reserve will cut U.S. interest rates later this year to boost the world's biggest economy. President Donald Trump on Thursday said U.S. complaints against Huawei Technologies Co Ltd might be resolved within the framework of a U.S.-China trade deal, while at the same time he called the Chinese telecommunications giant "very dangerous." On Thursday, it fell to its lowest since October 2017 after an early read on U.S. manufacturing activity for May showed the weakest pace of growth in almost a decade, suggesting a sharp slowdown in economic growth was under way. The single currency came under pressure after a private survey showed activity in Germany's services and manufacturing sectors fell in May, aggravating fears about the effect of unresolved trade disputes on Europe's largest economy. Compounding these worries, European parliamentary elections began on Thursday with eurosceptic parties expected to do well, raising concerns about the single currency's stability.
• The recent ratcheting up of U.S.-China trade tensions is creating uncertainties for businesses and could threaten economic growth, four Federal Reserve policymakers said on Thursday. The remarks suggest the outcome of the 10-month trade war between the world’s two largest economies will be an important factor as Fed policymakers weigh how long to stay “patient” on interest rates. “I feel like the data is good, but the mood is teetering, so if we get a relaxation or a reduction in the uncertainty...then I expect the economy’s momentum to be an upside risk to growth,” San Francisco Federal Reserve President Mary Daly said at a Dallas Fed conference. “If the uncertainties persist...then I think that’s a downside to the economy, because the uncertainty has real effects, but it also has effects on confidence, and that confidence feeds back into investment.” The comments came as researchers at the New York Fed published research showing the newest round of U.S. tariffs on Chinese imports will cost the typical American household $831 annually. The Trump administration this month increased existing tariffs on $200 billion in Chinese goods to 25% from 10%, prompting Beijing to retaliate with its own levies on U.S. imports, as talks to end a 10-month trade war between the world’s two largest economies stalled. The policymakers made the comments at a Dallas Fed conference on technology, where academics, educators, and policymakers gathered to discuss the effect of technological advances like artificial intelligence on inflation, labor markets and the economy.
• Oil prices recouped more than 1% on Friday but were on track for their biggest weekly loss this year after swelling inventories and jitters over an economic slowdown led to big falls earlier in the week. The forward price curve for Brent crude futures remains in backwardation, in which prices for prompt delivery are higher than those for later dispatch, implying tight market conditions and making it profitable to produce and sell oil immediately rather than store it for later sale. The OPEC has led supply cuts since the start of the year aimed at tightening the market and propping up prices. ANZ said U.S. sanctions on Iran's and Venezuela's oil industries would likely further reduce crude exports from OPEC, of which both countries are members But Friday's firmer prices could not make up the much bigger slumps earlier in the week, which have put crude futures on track for their biggest weekly losses this year, with Brent set for a decline of more than 5% And the glut has spread beyond North America. Struggling to cope with an economic slowdown and oversupply from fuels, Asian refinery margins this week fell to their lowest seasonal levels since at least the financial crisis a decade ago, triggering plans for refinery run cuts. Asian shares were hobbled near four-month lows on Friday on worries the U.S.-China trade spat was developing into a more entrenched strategic dispute between the world's two largest economies.

Gold – XAU

Gold on Wednesday made its intraday high of US$1287.24/oz and low of US$1272.76/oz. Gold pu by 0.784% at US$1283.30/oz.

Technicals in Focus:

In daily charts, prices are above 200DMA (1253) and breakage below will call for 1247. MACD is above zero line and histograms are decreasing trend and it will bring downward stance in the upcoming sessions. RSI is in neutral region and more upside is expected before it gets stretched. Stochastic Oscillator is in neutral territory and giving positive crossover to confirm bullish stance for intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above; buy above 1276-1254 with risk below 1254, targeting 1284-1292 and 1300-1309. Sell below 1284-1319 keeping stop loss closing above 1319, targeting 1269-1261 and 1254-1246.

Silver - XAG

Silver on Thursday made its intraday high of US$14.63/oz and low of US$14.40/oz. Silver settled up by 1.200% at US$14.57/oz.

Technicals in Focus:

On daily charts, silver is sustaining below200DMA (14.94), breakage above will lead to 15.60. MACD is above zero line and histograms are increasing trend and it will bring bullish stance in the upcoming sessions. RSI is in oversold region, indicating buy signal for now. The Stochastic Oscillator is in neutral region and giving positive crossover to show upside move for the intraday trade.

Trading Strategy: Buy on Dips

Based on the charts and explanations above, buy above 14.20-13.50 targeting 14.50-15.05-15.30 and 15.60-15.90; stop breakage below 13.50. Sell below 14.50-16.00 with stop loss above 16.00; targeting 14.20-13.90 and 13.50-13.20.

Oil - WTI

Crude Oil on Thursday made an intra‐day high of US$61.40/bbl, intraday low of US$57.31/bbl and settled down by 5.162% to close at US$58.14/bl.

Technicals in Focus:

On daily charts, oil is sustaining above its 100DMA i.e. 55.88 which is a resistance level and breakage above will call for 59.60. MACD is above zero line and histograms are in decreasing mode will bring bearish stance in the upcoming sessions. The Stochastic Oscillator is in oversold region and giving negative crossover for confirmation of bearish stance; while the RSI is in oversold region and more downside can be expected.

Trading Strategy: Neutral

Based on the charts and explanations above; sell below 59.00-61.20 with stop loss at 61.20; targeting 58.25-57.30-56.50 and 55.90-55.00. Buy above 58.25-55.00 with risk daily closing below 55.00 and targeting 59.00-60.00-61.20 and 62.00-62.50.

EUR/USD

EUR/USD on Thursday made an intraday low of US$1.1106/EUR, high of US$1.1186/EUR and settled the day up by 0.281% to close at US$1.1180/EUR.

Technicals in Focus:

On daily charts, prices are sustaining below 50DMA (1.1261), which become immediate resistance level, break above will target 1.1325-1.1410. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

Trading Strategy: Neutral to Buy

On daily charts, prices are sustaining below 50DMA (1.1261), which become immediate resistance level, break above will target 1.1325-1.1410. MACD is below zero line but histograms are increasing mode which will bring bullish view. Stochastic is in neutral territory and giving positive crossovers to signal for bullish outlook for intraday. 14D RSI is currently in neutral region and giving no directions to consider.

GBP/USD

GBP/USD on Thursday made an intra‐day low of US$1.2604/GBP, high of US$1.2683/GBP and settled the day down by 0,.022% to close at US$1.2656/GBP.

Technicals in Focus:

On daily charts, prices are sustaining above 200DMA (1.2960) is become major support level. 14-D RSI is currently in neutral region and direction is difficult to predict on RSI bases. The Stochastic Oscillator is in oversold territory and giving positive crossover to confirm bearish stance. MACD is above zero line but histograms are increasing lead to downward movement.

Trading Strategy: Neutral to Sell

Based on the charts and explanations above; sell below 1.2700-1.2890 with targets at 1.2660-1.2600 and 1.2550-1.2500 stop should be below 1.2890. Buy above 1.2660-1.2500 with targets 1.2700-1.2750-1.2850 and 1.2890-1.2930 with stop loss closing below 1.2500.

USD/JPY

USD/JPY on Thursday made intra‐day low of JPY109.45/USD and made an intraday high of JPY110.35/USD and settled the day down by 0.680% at JPY109.59/USD.

Technicals in Focus:

In daily charts, JPY is sustaining above 100DMA (110.64), which is initial support on the daily chart. 14-D RSI is currently in overbought region and chances of downward are expected based on RSI. MACD is above zero line but histograms are in decreasing mode which might lead to downward movement. The Stochastic Oscillator is in oversold territory and signaling to sell as it has given negative crossover to confirm bearish stance.

Trading Strategy: Neutral to Sell

Sell below 110.60-113.00 with risk above 113.00 targeting 110.00-109.55-109.05 and 108.40-107.70. Long positions above 110.00-107.70 with targets of 110.00-110.60-111.5 and 111.90-112.25 with stop below 107.50.